Real Estate Scams may be the sneakiest sort of scam out there. Scammers are very sophisticated and non-discriminate, targeting buyers, sellers, landlords, property owners, and real estate professionals. And they are hard to catch, so the trick is not to fall for them to start with.
That’s where I can help. Having been using technology for so many years, I’m better at spotting scams to protect you better. I send out blogs like this, warning my clients about what they may use to target their next victim.
Here are the most recent Real Estate Scams to be aware of:
Wire Fraud for Closing
Scammers will hack the email inbox of a principal party during a transaction, usually a Closing or Title Company. They can even assume an agent’s identity – their goal is to observe their target’s (one who was hacked) communications.
Once the transaction goes to closing and money is going to be moved, the scammer creates a legitimate-looking fake email address. They send this fake email to the buyer with wiring instructions for closing funds, directing them to an account not associated with the Closing or Title Company.
If buyers follow the detailed instructions of the fake email, they will unknowingly send thousands, perhaps hundreds or thousands of dollars, to the wrong account. Unfortunately, the money cannot be recovered and is gone forever.
This is devastating to all parties involved, but especially the party who sent the money.
How can you protect yourself and your money?
As a buyer, make sure you understand wiring instructions are coming from a reputable source. If you’re not confident the instructions are from the company issuing the real instructions, call them and confirm they sent you the email with the instructions and verify the email it is coming from. Enable a two-factor authentication.
Scams Targeting Vacation Rentals
This scam is a nightmare for potential renters ruining their vacation plans and pocketing their money. Scammers target prospective renters through sites like Airbnb and Vrbo, posting fake rental listings in unbelievable locations at unbelievable prices. (That is because it is unbelievable).
Scammers direct their targets to make all deposit and rent payments off these reputable companies and make the payment on platforms like Zelle or Venmo. At this point, the “tenants” plan their trip and don’t realize they don’t have a reservation until they arrive at their destination and not only are they out of the money they paid ahead, but they also don’t have a place to stay.
I have a system set up so if my listings (this doesn’t happen to just rental listings, but listings for sale are also used for these scams) show up on the internet where I didn’t advertise them, I inspect the advertising and will turn the fake advertising in for fraud.
If you catch a Vacation rental site directing you to make your deposit off their site, don’t go there. It’s a HUGE Red Flag If a “property owner” requests payment off the rental platform. Not only could the “property owner” a scammer, but they could also be cheating VRBO or Airbnb out of the 3% fee for using the platform.
Coupled with the Fake rental listings is the “Overpayment of a Short-term Rental.”
These scammers target the Short-term Rental owner by offering to pay a larger amount of money to reserve the property for an extended period. With this offer, the scammers also offer to make the payment off the booking engines of Airbnb and Vrbo. The rental owner may think this is a win since they are not paying the 3% booking fee through these companies.
Let’s say the scammer is offering the buyer $500 to reserve their unit, then “accidentally” overpays. They’ll claim something like, “I was supposed to pay you $500, but I made a mistake and paid you $5,000!”
If the property owner is not using the payment platform provided by Airbnb or Vrbo, they may feel pressured to refund through Venmo, Zelle or another cash app. If the owner “refunds” the overpayment, the scammer and the money are gone.
To protect yourself, always – always – always use established booking and payment platforms. Trying to save the 3% fee isn’t worth the risk of losing your money.
If you do not use a booking and payment platform, it would be good to have fraud protection on your business accounts. You’ll be protected should you fall victim to a short-term rental scam.
Unfortunately, more scams target buyers, sellers, landlords, property owners, and real estate professionals, and I will share those in a later post. However, it’s very important to stay vigilant, and if you ever suspect something suspicious – check it out BEFORE you send any money or sign up for anything!
I’m always on top of what is going on with any of my listings. Please know that I stay vigilant to ensure they are not used as bait for a scammer’s net.